The new construction project also comes at a crucial time when its assembly and packaging capacity in a Penang back-end facility is increasingly strained to the limit.
Osram predicts its Penang assembly and packaging plant will get trapped into a supply logjam in the next few years.
The back-end plant is scheduled to be completed by the end of 2013.
Osram now operates two front-end LED chip fabrication facilities in Regensburg, Germany and Penang, Malaysia.
“China is already today the biggest sales market with significant future potential. The new assembly plant enables us to better participate in the strong market growth in China and further extend our solid position in Asia,” said Wolfgang Dehen, CEO of OSRAM AG.
“Growing at a remarkable rate, Jiangsu Province’s LED industry is at the forefront in China. We will fully support Osram’s development in Wuxi with the highest quality service, and we also hope Osram can expand its investment in Wuxi to have the plant up and running as soon as possible,” said Xueyong Li, Governor of Jiangsu Province.
The contracts for the new Wuxi location were only signed in May this year.
The back-end facility will be sprawled on a 100,000 square meter compound.
Osram plans to invest a low three-digit million Euros over the next five years.
“With highly skilled personnel, a good infrastructure and experienced partners, Wuxi provides the best conditions for our new LED assembly,” said Aldo Kamper, CEO of the Osram Opto Semiconductors business unit.
The Asian region already represents around 35% of today’s global general lighting market. The share is expected to increase to 45% by 2020, according to recent studies.
The Chinese lighting market alone, worth over 8 billion Euros today, is predicted to more than double by 2020.
In fiscal year 2011, Osram generated about one fifth of its revenue in the Asia-Pacific region, where it employs over 16,000 employees.
This workforce is larger than that of any other region worldwide, and roughly half of it is employed in China. Osram has marketed products in the region for about 80 years, covering all major stages in the value chain from development and production to sales.